ADU to be included in GLA

[Terrel L. Shields]

If it has 2 electric meters, then it is a duplex....that's my story and I'm sticking to it. If it has only 1 meter it is an ADU.

 

[George Hatch]

By itself, the label doesn't drive what the dominant attributes of the property are or how the property would be occupied. I've seen jurisdictions where the zoning wouldn't allow a guest house to be rented out, so in that event the pool house or guest house is just a feature. But when both units are separately marketable in the rental market it is what it is.

Now the users may have their own approach to this in terms of which report to use but as far as who-is-doing-what that is a user consideration, not a market consideration.

 

[George Hatch]

If it has 2 electric meters, then it is a duplex....that's my story and I'm sticking to it. If it has only 1 meter it is an ADU.

I've appraised too many multi-family properties (including 5+ multi-family) that were single metered to use that as the dividing line for a 2nd unit.

 

[Carnivore]

If it has 2 electric meters, then it is a duplex....that's my story and I'm sticking to it. If it has only 1 meter it is an ADU.

Yep. There is a reason, not necessarily a good reason. I could be wrong, so I will put this in the form of a Question to anyone.

Does the Lending community, in General, have Different Loan rates/terms for SFR & 2-4 Multi-family?

If the answer is Yes. Then is it possible they are trying to pull the wool over someone's eye?

 

[DWiley]

If it has 2 electric meters, then it is a duplex....that's my story and I'm sticking to it. If it has only 1 meter it is an ADU.

That definitely would not work in my area. We have lots of 2 to 4s that are single metered.

It would seem that the GSEs definitely don't see it as a distinguisher, otherwise the question of how many meters would not even need to be on the 2 to 4 form.

 

[Terrel L. Shields]

We have lots of 2 to 4s that are single metered.

Well, I wouldn't call anything with 2 meters a "single family" anything. I suppose where the landlord is paying the electric, it wouldn't matter...but I can't recall any duplex that I call a duplex not having 2 meters here. Nor do I recall many ADUs that have a separate address - I assume a few do that are separate buildings.

 

[DWiley]

Well, I wouldn't call anything with 2 meters a "single family" anything. I suppose where the landlord is paying the electric, it wouldn't matter...but I can't recall any duplex that I call a duplex not having 2 meters.

Probably varies by area. We have lots of 2, 3 and 4 unit properties that are single metered, especially in older sections of the city.

 

[Sadie]

What does zoning allow for an ADU? That might drive your definition. Sometimes you have to tell your client that it is a duplex, not a SFR with ADU. If you don't know what it is, how are you going to put a value on it?

 

[Sadie]

Well, I wouldn't call anything with 2 meters a "single family" anything. I suppose where the landlord is paying the electric, it wouldn't matter...but I can't recall any duplex that I call a duplex not having 2 meters here. Nor do I recall many ADUs that have a separate address - I assume a few do that are separate buildings.

I have seen one meter for more than 1 property. Usually the landlord pays the bill in those cases. Here, you can't share a water heater unless its an ADU.

 

[Tim Hicks (Texas)]

I have seen second meters on workshops around here. Is this a case of taking the easiest route instead of the proper route? Now if the appraiser had three model matches then it would not matter how it was classified according to a proper value, but saying two separate units are equal one congruent unit sounds misleading to me. There should be some form of functional obsolescence for layout involved. I wonder if that was even considered? Even homes with casitas or guest quarters should not be considered equal to a similar size congruent SFR unless paired data proves it.